Wednesday, 22 April 2009

Budget 2009: a change of rhetoric and little else

Under the title of Building Britain's Future, Chancellor Alastair Darling's 2009 Budget Report declares its objective to "build a strong economy and a fair society, where there is opportunity and security for all." Few will be surprised that what appears on the next 268 pages comes nowhere close to matching such lofty rhetoric.

The main purpose of the present Budget, of course, is to respond to the "exceptional challenges" facing the world economy after "the financial crisis of late 2008 precipitat[ed] a steep and synchronised global downturn." Essentially, how to maintain and revive the very financial systems and economic dogma that caused the crisis in the first place - with the necessary emphasis on "change of direction" in the cause of maintaining the status quo. This stance is exemplified by the Department for Business, Enterprise, and Regulatory Reform's (BERR) New Industry, New Jobs report, which preempted the Budget by declaring the government's abandonment of "support for market forces" in favour of "an interventionist strategy under which the Government will subsidise the growth industries of the future." Business Secretary Peter Mandelson, speaking to The Independent, explained that his "strategic plan" is central to the new Budget;

If markets fail or don't work efficiently, government has a role to play – as we saw in the financial markets. The Government's job is not to substitute for markets or displace the private sector. We are not into bailing out the past, but removing the barriers to investing in the future.

This is unlike the previous doctrine, dominant since the Reagan-Thatcher years, whereby the government had "a role to play" in "removing the barriers" to the free market so that it "works efficiently" and doesn't "fail." The "change of direction," then, is obvious; the prevailing doctrine is now called "interventionism" where before it was "support for market forces." Thus today's Budget revealed the total cost of the government rescue of the financial markets as a staggering £1,220bn and a national debt of £1.2 trillion, whilst government borrowing will hit a "record" £175bn.

Of course, one does not have to look far - or even read the budget itself - to find the positives included amongst the measures to "remove the barriers" for "markets." A basic fact of (marginally) democratic societies is that they will provide sops to the electorate when needed, as long as it is not too radical for the important people whose money and influence keeps them in power. BBC News helpfully lists "key points" of the budget for mass consumption and as a focus of acceptable debate. These "key points" will be derided by "conservatives" within the narrow mainstream political spectrum as "socialist" (a word utterly without meaning in this context) and "unrealistic" in the current climate as they offers too much help to the poor, and hailed as "progressive" by "liberals" for throwing a sop to the "middle classes" without actually affecting the circumstances of the poorest even one iota.

Beyond the acceptable debate, and the state-defined "key points," however, is the fact that the Budget will "deliver billions of pounds" in "cash savings" by "improving the capability and planning capacity of NHS commissioners" and "extending" the "NHS tariff pricing system." Further extension of both the target-driven bureaucracy weighing down our health care system and the privatisation process which - as demonstrated by the example of the United States - achieves greater "success" by pricing out the poorest and least healthy cannot be contemplated in acceptable discourse.

This is but one example. Also notable is the redoubled commitment to "public sector pay restraint," which the media constantly draws support for by publicising cases of very highly-paid senior civil servants, but in fact affects those at the lowest levels and on the "frontline" of delivering services to the public. Increasing the "annual exempt amount" for capital gains tax, "extended inheritance tax reliefs" which now qualify for "capital gains tax hold over relief," a "higher rate of tax relief" for "firms investing over £50,000 in qualifying plant and machinery," a "temporary" increase in "the threshold at which business rates is [sic] charged on empty property" from "£2,200 to £15,000," and a whole host of other pro-business and pro-property measures also deserve attention.

Clearly, the objective of "a strong economy" outweighs that for "a fair society," and "opportunity and security for all" refers to "all" of the business and propertied classes, with perhaps a few beyond this elite area benefiting as a democratic sop. As at the G20 summit, our leaders have declared a "change of direction" in the interests of economic "revolution" whilst reviving and strengthening the very same institutions that are at the heart of the present crisis.